By the standards of his day, the Roman Emperor Diocletian was not a blood-thirsty man. He did not believe in unnecessary killing. But when, in AD 301, he drew up a set of regulations to curb inflation, he decreed that there could be only one punishment for anyone who broke the law - death. Diocletian's edict fixed maximum prices for about 1,000 articles, including food, raw materials, textiles, and transport, and also for wages. The edict, though not the first anti-inflation policy ever attempted, was the first on a very large scale, and the emperor was determined to make it work. He passed the word to every corner of the empire: anyone who exceeded the maximum price, or who tried to get around the rules by keeping goods off the market, would face summary execution. To a large extent, this was a desperate measure reflecting a desperate situation. Diocletian had come to power after half a century of political upheaval, a time of instability and almost non-stop warfare. The capture of a previous Emperor, Valerian, by barbarians in AD259, for instance, had led to a financial crash in which people had rushed to turn their money into goods, creating a rate of inflation estimated at 1,000 per cent over 17 years, which is about 50 per cent per annum. With prices still soaring in the years that followed, the government was forced to respond by debasing the coinage, so that what looked like coins of precious metal was mostly just copper underneath.
Sounds familiar? The preamble to Diocletian's edict, which carefully diverts attention from the government's shortcomings by putting the blame on speculators who gambled on grain futures, sounds even more familiar. Responsible for these fiscal problems were "men who have nothing better to do than carve up for their own advantage the benefits sent by the gods ... men who are themselves swimming in a wealth that would satisfy a whole people, who think only of their gain and their percentage."
Equally familiar to us today is the fact that Diocletian's policy did not work. He discovered, as governments have been discovering ever since, that inflation cannot be controlled simply by legislation. Rather than see their money devalued still further, people once again rushed to stockpile all the goods they could lay their hands on. The black market flourished at the expense of the rest of the economy and, to the best of my knowledge, no heads ever rolled as a result of Diocletian's harsh edict. The world's first prices-and-incomes policy (even when backed up with the threat of capital punishment) had come to nothing.
Bill Hutchings
Return
to the February 2000 Features page
return to Home page and main index
page last updated 6 FEBRUARY 2000